Importance of Strategy Process and Strategy Context in Determining Strategy Content - Coursework Example

This essay is to critically evaluate the importance of strategy context and strategy process in determining strategy content. A definition of each term is provided for a better understanding of how these terms are related. The strategy simply refers to the course of a business in its daily activities. The protocol that a business uses or simply the criteria followed in carrying out day to day activities. Strategy content refers to the actions, measures and choices included in the strategy that leads an organization to realize its future. Strategy process and strategy context are very crucial in determining what is included in a strategy that will guide the organization over a given period of time. A strategy is essential in determining the ability of a company to effectively participate in any market; either domestic or global market. (De Wit, B., and Meyer, R., 2015). Such companies use various strategies that the competitor has got no idea about. Examples of such companies that have used effective strategies to play off the competitor include IBM, Apple, and Coca-Cola companies just to mention a few. Using these outstanding strategies, these companies have been able to enter into the global market after dominating the domestic markets effectively.

Strategy process refers to the mechanism of identifying the criteria used in identifying strategies and the set criteria for implementation. A strategy process evaluates the effectiveness of a strategy and identifies the strengths and weaknesses of the strategy. It also helps in monitoring the entire strategy (Pettigrew, A. 2004, 12). Strategy process is sub- divided into four stages namely: identifying (which involves mentioning the problem), diagnosing (putting in place measures to curb the problem), conceiving and finally realizing (enjoying the benefits of a good strategy). By the use of a process, managers can measure the attractiveness of outcomes compared to expectations (Johnson, G., Melin, L. and Whittington, R., 2003, 18). In the four stages of action, let’s say, in the case of identifying, a manager is able to point out and identify the problems facing the organization as well as the sources of failure. Therefore, we can say that strategy process helps in problem-solving. Unattended problems in an organization may eventually lead to total failure of the entire firm. A manager can avoid failure by using a well spelled out strategy process (De Wit, B. and Meyer, R., 2015, 22).

Diagnosis involves troubleshooting a problem. In this stage, the manager is able to place mechanisms that solve issues in the organization. (Slevin, D.P., and Covin, J.G., 2013, 77) For example, the manufacturing department may be producing less than the distribution department requires. On the other hand, the manufacturing department is utilizing all the resources that the supply department is availing. This means that if there is a problem, the problem is not in the manufacturing department but in the supply department. This is because the supply department is responsible for supplying raw materials that the manufacturing department uses. A manager should, therefore, get to the supply department and inquire on the cause of the shortage of supply of raw materials. If the issue is an increase in the price of raw materials and therefore the lower quantity purchased, the manager should allocate more funds to supply department. If some officials are corrupt and are embezzling funds, then the manager should take the necessary course of action. Therefore, strategy process gives managers direction in formulating and implementing new strategy contents.

Conceiving in strategy process refers to the act of upholding the best decisions to realize set goals (Whittington, R., 2014, 1578). After the manager has solved issues, he dispenses decisions that will guide the organization in realizing its set objectives in a specific time period. This is the argument having in mind that the business environment is changing day in day out (Hrebiniak, L. and Joyce, W. 2010,344). The final step in strategy process is the realization. After having the strategies in place and examining the possibilities of achieving the set goals over a specific time-frame, a manager should measure how much they have achieved with respect to what was expected. If they have realized more than expected, the organization should uphold the strategies for the upcoming time period. If otherwise, the organization should drop the strategies and identify the causes of failure to avoid repeated mistakes. (Smircich, L., and Stubbart, C., 2006,728)

An action research has been conducted in a municipality in Finland. The main objective of the research was to explain the reasons behind the lack of strategy implementation in the municipality. The results showed that management staff had a very high significance in strategy process compared to the operations staff and politicians (Smircich, L., and Stubbart, C., 2006,730). This statistical data can be used to draw meaningful conclusions that the management is responsible for determining the strategy content using strategy process for better implementation of strategies.

Coca cola is a global company which has used this concept of strategy process to realize their organizational goals. For example, the company identified the cause of reduced volume of sales(identifying the problem). They noted that in the global market, the problem was the price of the drink in the different geographical areas. Therefore, in relation to strategy process, the company was able to identify and mention the problem. The organization then placed a new pricing strategy that will favor every market in every foreign market. The price was set below the prices of other local cold-drink manufacturing companies. They placed this plan to work for five years from 2004. In 2009, the company was able to measure the differences in sales before and after the new pricing strategy. The results were more than expected and therefore, the company decided to uphold the strategy to date (Dess, G. Lumpkin, G. and Covin, J., 2000, 680). We can, therefore, see that the company had considered all the four stages of action involved in the strategy process. This was effective in placing their strategic content in place to play off the competitors. Other companies that have practiced the same process include Apple Company in making the iPod. By doing so, it was able to play off the Walkman from Sony (Langley, A., 2003,701). IBM and Unilever are good examples too.

According to Carpenter, M.A. and Westphal, J.D., (2010. 203) Strategy context refers to the circumstances that constrain the determination of strategy process and content. The determinants are definitely the limiting circumstances. The context may be affecting the organization either internally or externally. Therefore, we can say that context checks in the internal and external environments of a business. All these factors (included in internal and external business environments) determine how the strategy content will be like (Carpenter, M. and Westphal, J., 2010, 650). The content must be able to overcome challenges in the changing market as well as internal changing situations and circumstances. In order to effectively understand how context determines the strategy content, we will examine the internal and external environments and state the importance of examining the specific environments.

In examining the external environment, the political, economical, technological and legal environment of a business will be considered. Before a manager identifies the strategy content, he should first evaluate the political status of the location of the business. (Carpenter, M.A., and Westphal, J.D., 2010., 629). For example, in countries experiencing political instability, the business might end up halting its activities over long periods of time. The business will eventually exit the market if the instability persists. Therefore, before determining the strategy content, the manager should check on the stability of the ruling government and the possible sanctions that the government may put in place regarding business activities (Wooldridge, B. and Floyd, S. 2012, 238). A manager should also consider the technological as well as economical factors that may influence the activities of the organization. (Hrebiniak, L.G., and Joyce, W.F., 2010,340) For example, Use of social media platforms may not work well in china compared to countries in the west and Africa. The culture of Chinese people condones the use of these social media platforms such as Facebook, especially among the youths (Whittington, R., 2014, 1581). Instead, they develop their own platforms which they use exclusively after working hours.

In examining the internal environment, the acronym SWOT is used. This stands for strengths, weaknesses, opportunities and threats to a firm. If a manager is able to examine all these factors, he will definitely make an effective strategy content (Slevin, D. and Covin, J., 2013,201). After examining these factors closely, we can conclude that a strategy context is a vital tool in determining strategy content.

Many examples can be used to elaborate on the importance of strategy context in determining strategy content. Firms in the United States of America that provide internet services such as Google, Yahoo, and eBay have been suffering tremendous losses in the china markets. This is due to a failure by managers to examine the internal and external contexts. eBay have been constantly challenged by local firms such as Taobao (Langley, A., 2003. 697). A good example of a success under strategy context in determining strategy content is Unilever. The global company closely examined the market situation and its internal situation and came up with a five-year plan from2015 to 2020. They modified their products to favor the low and medium-income consumers over the different geographical regions. In the past one year, the company has been doing exemplary well compared to other competing firms. The managers have also confirmed increased sales in the 2015/2016 reports (De Wit, B. and Meyer, R., 2015, 14).

In conclusion, strategy process and strategy context are vital tools in determining effective strategy contents. The strategy content of an organization determines how effective a firm is in competing with other firms either domestically or globally. Strategy process helps in identifying causes of failure, correcting the causes of failure, measuring the level of achievement as well as determine what strategy to uphold and which to drop. Strategy context involves examining the internal and external environments of the business. This helps in determining which strategy will effectively operate in a given geographical locality (Chakravarthy, B. and Doz, Y., 2008, 7). Social, political, technological, legal and economic factors greatly influence the type of strategy to be implemented. We can, therefore, say that strategy context is very important in determining the strategy content.